The European Central Bank’s cybersecurity stress test next year will not have a direct impact on capital requirements, limiting the exercise’s potential impact on investor payments.
The test will be a learning experience for lenders and the supervisor, ECB officials said in a call with bank executives last week, according to people briefed on the meeting. Even bad results for the participating banks do not automatically translate into higher capital requirements, officials said, although they did not rule out an indirect effect.
The ECB indicated in the call that the test will simulate an attack targeting the databases underlying the main operating systems of the banks, and that it intends to send the test documents to the banks on November, said the people, who asked not to be identified to discuss privacy. information.
An ECB spokesman declined to comment.
The supervisor is now laying the groundwork for Europe’s first cyber stress test of banks, to map what it sees as rising risks to financial stability arising from criminal acts such as data theft and -cyber attack. Set for the start of next year, the trial will examine how lenders in the region would respond to a potentially crippling attack on their IT.
Stress tests are one of the most important tools for the ECB to determine how resilient banks are to various shocks. Bad results in its biennial examination of banks’ ability to withstand an economic downturn often lead to higher capital requirements, which restrict lenders’ ability to pay. of dividends or making share buybacks.
The nature of the stress test as a learning exercise is reminiscent of how the ECB charged the first climatic stress test for banks, which was carried out last year. Although that test had no direct impact on capital requirements, the ECB later said it contributed to its decision to increase the minimum amount of capital that many banks must hold by announcing the annual assessment of risks faced by banks. .
Cyber stress testing will be “a new exercise, and we will spend a lot of time and resources on it,” ECB banking supervision head Andrea Enria said in an interview with a Lithuanian newspaper in March. Enria said he expects to publish the results in mid-2024.
Photo: A sculpture by artist Guiseppe Penone outside the headquarters of the European Central Bank (ECB) in Frankfurt. Photo credit: Martin Leissl/Bloomberg
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